Outgrowing the Union A survey of the European Union September 25th 2004 Republication, copying or redistribution by any means is expressly prohibited without the prior written permission of The Economist The Economist September 25th 2004 A survey of the European Union 1 A divided Union The European Union has achieved much, but it may now be pushing up against its limits, says Gideon Rachman Also in this section OR many centuries Europe was the omic, but their goals were political. Fworld’s most powerful, prosperous and Starting with agreements between six technologically advanced continent. That countries on the pooling of coal and steel Peace in our time period of European cultural and political resources in 1951 and moving on to the cre- Europe has largely avoided war for 60 years, dominance came to a denitive end with ation of a common market in 1957, the EU but the European Union no longer gets the the second world war. In 1945 Germany has gradually spread into a plethora of ac- credit. Page 2 was defeated and in ruins; France was tivities. Today it is hard to think of a eld of half-starved and humiliated; Britain was public policy in which it is not active. It is E pluribus unum? bankrupt and on the point of losing its em- involved in everything from foreign policy pire; Spain was a backward, isolated dic- to immigration, and is reckoned to be The pros and cons of becoming a superpower. tatorship; and the countries of central and responsible for around half of all new Page 4 eastern Europe had been absorbed into a laws passed in its member states. Soviet empire. Nobody would have The people who run the European Passport to prosperity guessed that Europe was at the beginning Commission in Brussels like to believe that EU of a new golden age. this golden age of peace and prosperity is That was one of the ’s big attractions; but is EU it still? Page 6 In 2004, a continent that had been directly linked to the rise of the . Yet this wracked by war for centuries can look view is often contested. Peace in Europe, it back on almost 60 years spent largely at is argued, could equally be credited to the One for all peace. A continent that lay in economic ru- presence of American troops on European The perils of a single currency. Page 9 ins in 1945 is now prosperous as never be- soil, and prosperity to the same causes of fore. A continent that in 1942 could list only economic growth as in the United States or four proper democracies is almost entirely Asia, such as rising productivity and in- No love lost democratic. A continent that was divided creasing trade. As for freedom, the revolu- The EU is becoming ever bigger and more by the iron curtain until 1989 now enjoys tions in central Europe and Spain, Portugal powerfuland ever less popular. Page 10 free movement of people and common and Greece were not led from Brussels. political institutions for 25 countries, Indeed, say critics of the EU, far from stretching from the Atlantic coast of Portu- promoting peace, prosperity and freedom, Europe à la carte gal to the borders of Russia. it now threatens all of these achievements. With many more members and increasingly This new period of peace and prosper- In Britain, for example, Eurosceptics see a diverging interests, a one-size Europe may no ity has coincided with the rise of a new direct threat to British self-government longer t all. Page 12 form of political and economic organisa- and democracy in the many laws emanat- tion. The founding fathers of what is now ing from institutions in Brussels over the European UnionJean Monnet, a which the British electorate has no control. French civil servant, and Robert Schuman, In Britain and elsewhere, critics also argue a French foreign minister of the 1950s that the EU is increasingly responsible for a were convinced that the origins of conict tide of unnecessary regulation that is en- A list of sources can be found online in Europe lay in the continent’s system of gulng the European economy. And some www.economist.com/surveys competing nation-states. As Schuman put believe that its overweening ambition An audio interview with the author is at it, Because Europe was not united, we may end up causing exactly the sort of con- www.economist.com/audio have had war. Those founding fathers icts that it has been seeking to eradicate. were determined to build a new union in Martin Feldstein, an eminent American Past articles on the EU are at Europe that would banish conict for economist, has argued that the launch of a www.economist.com/europeanunion good. Their building-blocks were econ- single European currency could cause po-1 2 A survey of the European Union The Economist September 25th 2004 2 litical tensions culminating in war. pool, there is always water there. mainly national in character. But now they But for now the EU is riding high, with The trouble with that kind of philoso- can cause tensions across the Union. more and more countries seeking to join it. phy is that it can eventually lead to a nasty Enlargement is another example of a Having started with just six members in accident, and indeed the European project success that makes the EU a riskier place. 1957Belgium, France, Germany, Italy, looks increasingly troubled. Economically, By increasing the diversity of political in- Luxembourg and the Netherlandsthe EU the EU is falling further behind the United terests and views within the Union, it has now has 25. Its biggest ever expansion was States, and can only envy the dynamism made them much harder to contain within completed in May this year with the addi- of China or India. Politically, its members a single framework. tion of ten new members, mainly from the have been at each other’s throats over Iraq, European federaliststhe heirs to Mon- former Soviet block. The Poles, the Spanish the management of the euro and the con- net and Schumanare well aware of these and others undoubtedly won their free- stitution. Perhaps most dangerously of all, problems. Some believe that a new impe- dom without any help from Brussels. But the EU is plagued by a lack of popular un- tus for European unity can be provided by they all saw joining the EU as a way of derstanding and enthusiasm. trying to build up the EU into a new super- consolidating democratic gains and spur- powera global force that can equal the ring economic and political modernisa- The penalties of success United States. But so far any moves in that tion. For much the same reasons Turkey The survey will argue that many of the direction have served only to deepen divi- and the Balkan countries are now waiting EU’s current diculties stem from its past sions within the EU, in particular over atti- in the wings. successes. In post-war Europe, achieving tudes to America. Enlargement should be enough of a peace and re-establishing prosperity The EU’s new constitution represents challenge to keep the Brussels machine seemed like urgent and dicult tasks that another eort to preserve and deepen humming for the foreseeable future. But required political sacrices. Now, though, European unity, but it too could backre. oddly enough, many of the most ardent long years of peace and prosperity in west- For the constitution to come into force, it believers in the creation of a European fed- ern Europe, together with the collapse of must be approved by all 25 EU countries. At eration see enlargement as an unwelcome the Soviet threat, make further European least 11 of them are likely to hold referen- distraction from the EU’s most urgent busi- integration seem much less urgent. Indeed, dums, and in a few of those, notably Brit- ness: to develop into a real political union. the very depth of the political integration ain, the verdict is likely to be negative. Such Enlargement and political unionwiden- achieved so far has caused something of a an outcome could well provoke a crisis ing and deepening the EUhave often backlash as the EU has gained new powers within the Union. been portrayed as opposing courses, but in that threaten deeply rooted national tradi- This survey will conclude that the EU fact in the past ve years they have moved tions. Sometimes this has been in impor- may indeed split. But a split need not be a ahead simultaneously. On January 1st tant elds such as frontier controls and s- disaster. It could lead to a multi-layered EU 2002, 12 EU countries ditched their na- cal policy, but sometimes, too, it has been in which dierent countries adopt dier- tional currencies and adopt a new single in areas that irritate by their triviality. ent levels of political integration and ex- currency, the euro; and in June 2004, the 25 The post-war gains in European pros- periment with dierent economic models. EU governments agreed on the Union’s perity may also have begun to create their If the EU were preserved as an over-arch- rst ever written constitution. own problems. Rich countries such as Ger- ing framework, it could actually benet Over the past decade Europe, a conti- many and France were encouraged to de- from such diversity. But there is also a nent often accused of sclerotic caution, has velop elaborate welfare states which are darker, if less likely possibility.